AMC Entertainment (NYSE:AMC) has certainly seen its fair share of upside during recent meme stock rallies. In fact, during this year’s recent surge, AMC stock soared as speculators piled into this beaten-down name.

Much of this activity was tied to fellow meme stock GameStop (NYSE:GME), and the re-entrance of Keith Gill and retail investors into the name. However, aside from highly speculative factors, there aren’t really any fundamental catalysts that suggest this is a stock worth buying right now.

So, for those looking to put capital to work in this environment, the question is whether AMC is worth the risk right now. Here’s why I think this is a meme stock to avoid in this current backdrop.

AMC Stock Will Continue To Be Volatile

AMC faces upcoming capital needs and potential volatility, per analysts at Wedbush. The firm, noted for its bullish analysts, has been among the group suggesting investors be careful with this turnaround story.

Despite repaying $1 billion in debt since 2022, the cinema operator still grapples with a $4.4 billion outstanding debt load. Much of this debt will come due in 2026, which could cause additional share sales that would dilute existing shareholders further.

Considering AMC’s eagerness to issue shares every time its stock pops, this presents a difficult timing aspect for investors looking to ride another meme surge higher, even over very short time frames.

The company’s focus on debt reduction is clouded by its heavy debt burden and lack of dividends. These factors overshadow potential growth in market share and European revenues.

Currently, AMC remains reliant on equity sales to raise capital and manage interest payments amid ongoing losses, contributing to expected volatility in its stock prices.

Wedbush noted tough year-on-year industry comparisons because of recent box office struggles, expecting a rebound by summer despite challenges until September.

While it’s important to highlight AMC’s potential growth with a strong 2025 film slate and increased releases, the company’s fundamentals don’t appear to be pointing in the right direction at all.

Competition is Tightening

With Neftlix (NASDAQ:NFLX) recently launching its own popcorn brand Netflix Now Popping, the said release now poses competition with AMC’s Perfectly Popcorn. Netflix partnered with Popcorn Indiana on the said popcorn brand.

This is the same partner AMC shows, with Netflix Now Popping also being made available in Walmart (NYSE:WMT) stores.

With Walmart’s extensive retail footprint and AMC’s established presence, this competition poses a challenge for AMC CEO Adam Aron.

AMC Theatres sells ready-to-eat and unpopped popcorn in classic varieties: Classic Butter, Extra Butter, and a Lightly Salted option. Netflix, on the other hand, launched flavors like Cult Classic Cheddar Kettle Corn and Swoonworthy Cinnamon Kettle Corn.

AMC’s straightforward flavor names contrast with Netflix’s more complex offerings. Netflix aimed to appeal to diverse tastes with its popcorn line, despite having 270 million subscribers and offering just two flavors, which seems limited in variety.

This move by rival Netflix is perhaps one carried out in jest. However, it’s emblematic of the existing competitive forces many are already focusing on when it comes to AMC.

The company’s entire business model has been upended by streaming services, and it’s unclear how viable the company’s business model is long-term. Those who have read my take on this company already know I think streaming will take much more share over time from cinema operators.

This latest move to compete in the popcorn business is just emblematic of an ongoing market share battle I think AMC will lose.

AMC is a Sell

Investors should rightly question the wisdom of buying AMC stock. The film industry faces challenges, as highlighted by mixed performances like Disney’s Inside Out 2 with a $154 million release and Bad Boys: Ride or Die’s $56 million opening.

AMC’s reliance on summer blockbusters to drive attendance is hampered by a reduced lineup, down from previous years. 

While there’s certainly the possibility of future meme stock-related surges, I think AMC remains far too risky of a bet here. There are far better options for growth investors to pursue in this current market. At least, that’s my ongoing view of this embattled theater chain operator.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.